Geely's empire

Mercedes-Benz maker fears new, active Chinese investor

Volvo reagiert auf Geely-Einstieg bei Daimler
Is this a friendly bear? Daimler wants to know. Source: DPA

Li Shufu, a self-made Chinese billionaire, is a bit like Henry Ford or VW’s Ferdinand Piëch. Mr. Li founded carmaker Geely in 1986 as a refrigerator maker and started making cars in the late 1990s. Geely, which means “lucky” in Chinese, is now China’s largest private carmaker; it owns Volvo and uses Swedish technology in its vehicles.

Just like Mr. Ford and Mr. Piëch, the grandson of VW Beetle designer Ferdinand Porsche and a former CEO of VW, Mr. Li is an engineer. Like Mr. Piëch, the 54-year old Chinese businessman steered his company so it could include a number of brands that could share platforms and development costs.

Mr. Li’s activism has executives at Daimler worried. CEO Dieter Zetsche and his team learned on Friday that Geely had overnight become the single biggest shareholder in the maker of Mercedes-Benz cars and trucks with a 9.69 percent stake.  Mr. Li, a long-time Mercedes-Benz fan who modeled Geely’s first car after one, is eyeing one of Daimler’s 20 supervisory board seats, something the Germans dislike, sources told Handelsblatt. The non-executive board oversees management and discusses vital information, such as strategy, new models and technologies. “We cannot share our discussions with a representative of one our rivals,” a source said.

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